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IMPORTANT NEWS: New Real Estate Regulations in Ecuador as December 2013

SUPERINTENDENCY OF COMPANIES REGULATIONS FOR THE OPERATION OF REAL ESTATE COMPANIES

 

Source: SUPERINTENDENCY OF COMPANIES

Resolution No. SC.DSC.G.13.014 of the Superintendence of Companies comprising the Regulation for the operation of companies that carry out real estate activities was published in Official Register No. 146 on 18 December, 2013.

In accordance with the Regulation, it is mandatory for companies whose corporate objective is real estate activity in any phase (promotion, construction, marketing etc.) and that receive money from clients in advance to delivering housing and buildings to comply with the following:

  • To own the land on which the project will be developed or to hold the fiduciary rights in the trust that owns the land.
  • To obtain the necessary permission for construction from competent public bodies.
  • To possess an economic budget for each project. This must include the duly assessed financial projection, estimated time of completion of the project, the sale price of each housing unit, and the parameters for achieving the break-even point and profitability.
  • To sign and comply with promissory purchase/sale agreements establishing price, payment conditions, closing date and deadline for signing the public deed, and to sign the final deeds of sale.
  • To follow the requirements of the Superintendence of Companies and comply with all provisions issued by it.
  • If companies carry out their activity through a Escrow Business Trust, they must also comply with regulations issued by the National Securities Council.

The Resolution also establishes that for the development of real estate projects that require “financial resources from promissory purchase/sale agreements for such project’s property units, before entering into the agreement a Fiduciary Escrow Trust must be created allowing a fund and trust manager to manage said resources”.

Companies who carry out real estate activity are, among other things, prohibited to enter into private preliminary reservation or promissory sales agreements; to sign more than one promissory sales agreement for the same asset; and to designate money from a specific real estate project to other real estate projects.

The Ombudsman will receive complaints regarding discriminatory or inequitable clauses, without prejudice to complaints made before the Superintendence of Companies and relevant legal action.

The Superintendence of Companies will carry out inspections to verify compliance with the current regulations by real estate companies. In the case of observations, the Company will have five days to give its view on the matter. If the Superintendence of Companies considers that the Company is involved in one or more grounds for intervention, it will proceed to “declare a state of intervention in the company and appoint an intervention supervisor”. The supervisor will issue a report regarding the general situation of the company. If the company cannot apply corrective measures to overcome a negative situation that presents risks to its clients, or if said measures are not complied with within the given deadlines, the Company may be declared dissolved.

December 19, 2013

New Silicon Valley in the Andes: Promise and paradox

By Eric Mack
Editor’s note: This is part 2 of an exclusive four-part Crave series on Ecuador’s plans to transform itself into a new hub of science, technology, and innovation. Read part 1, “Plotting the next Silicon Valley — you’ll never guess where.” Planners say their aim is to create a ‘Silicon Valley of South America,’ to attract scientists and researchers from all parts of the globe.  Mack is a writer for Crave, managing editor of Crowdsourcing.org and the author of books about Alaska and Android.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
These guys can no longer get this big without some help from humans…and renewable energy.
(Credit: Johanna DeBiase)

GALAPAGOS ISLANDS, Ecuador–There’s a small group of solar panels set up next to a giant tortoise hatchery that’s currently under renovation here. It wasn’t many decades ago that these remarkable gentle giants — which never stop growing and can live to be 150 and the size of a kitchen table — didn’t need help from humans to survive in their native habitat.

Ironically, it is the other species humans brought with them to this remote volcanic Pacific archipelago that have endangered these tortoises. Dogs, pigs, goats, rats, and even ants all prey on young tortoises here, making it virtually impossible for them to survive their first few years in the wild. Instead, they’re raised in facilities like this one near the Charles Darwin Research Station.

There’s plenty more paradox to be found on the Ecuadorian mainland.

The great strides made in the last five years toward modernizing this country after decades of instability have largely been financed by Ecuador’s significant oil resources. Yet, as the country’s socialist president, Rafael Correa, begins his third term in office pushing forward on perhaps its most ambitious project — a planned city of science and innovation dubbed “Yachay” that aims to be part Silicon Valley, part Dubai, and part Shenzhen, China — his administration has opted to lock up one of his country’s richest oil deposits.

Solar panels help power tortoise breeding centers like this one on the Galapagos Islands.
(Credit: Eric Mack/CNET)

Rather than extract the hundreds of millions of barrels of crude beneath Yasuni National Park, one of the world’s most biologically diverse rain forests, Ecuador has instead asked the world to pay it to not drill there. The scheme falls somewhere between crowdfunding and ecological blackmail, but demonstrates a certain amount of audaciousness from a government that also defaulted on a huge chunk of its global bonds after declaring the international debt to be illegitimate.

This is the kind of comfort with paradox that is required of a government hoping to force a small and, until recently, backwards developing nation into a leadership position in the world of science and innovation. But after hearing the pitch and seeing the progress, it’s clear some important people outside Ecuador are ready to file this Yachay thing under “so crazy, it just might work.”

In addition to support from South Korea and CalTech, the Murdoch Developmental Center in North Carolina’s research triangle area has expressed interest in a partnership, as have a few European institutions, according to Rene Ramirez, Ecuador’s minister of higher education, science, technology, and innovation.

Cynicism and broken promises
Then again, like many other developing nations, Ecuador is no stranger to cynicism and broken promises. Editorials in Ecuador’s media have accused Correa of being wasteful with public funds; the daily newspaper La Hora called Yachay a “farce.” In response to the first part of this series, Martin Pallares, a former Knight fellow at Stanford University and a journalist for Quito’s El Comercio newspaper tweeted this about the project: “Hope it’ll happen but I’m afraid no (Silicon) Valley will pop up in a country run by a President who has banished checks/balances.”

Correa has had a thorny relationship with the press, bringing defamation suits against muckracking journalists who have criticized the president, including allegations of corruption. A handful of journalists were convicted and received harsh prison sentences, only to be pardoned by Correa. The confrontations between the government and the press landed Ecuador on the Committee to Protect Journalists’ most recent “risk list” alongside Syria, Pakistan, and Iran (nearby Brazil also made the list).

And, of course, there’s also the aforementioned cold shoulder given to international investors, giving the wider, capitalist world plenty of reason to smirk at such an ambitious project from such a small and relatively isolated nation.

Yet the team behind Yachay seems willing to put in the work to sell their vision to the world, convinced they’ve got something to offer.

Ecuador’s Yasuni National Park
(Credit: Yasuni-ITT)

“It is a City of Knowledge in order to build a country of knowledge,” Ramirez tells me on a visit to his ministry’s office in the capitol of Quito. “Yachay is linked to the areas of knowledge and the strategic industries that we are hoping to develop in Ecuador.”

When the team behind Yachay talks about the project, the paradoxes that make up today’s Ecuador combine into a more holistic vision in which the contradictions cancel each other out and disappear as if part of an algebra problem. For example, the work done at Yachay will center around a handful of areas, including renewable energy that could (in theory) reduce the temptation to drill the rain forest, preserving its biological treasures to assist in research into another of Yachay’s focus areas — pharmaceuticals.

The idea would be “not only to produce [generic drugs], but mainly to link it to an area where we have a competitive advantage in Ecuador,” Ramirez explains. “We have nearby numerous ecosystems which make this country the most megadiverse in the world.”

Of course, the mega-biodiversity Ramirez speaks of is of less value if it’s spoiled by pollution and other environmental impacts of oil extraction, so he talks not only of developing more clean energy tech at Yachay — he claims that only 40 percent of Ecuador’s energy demand is met by fossil fuels, a number he says will drop to 6 percent by 2020 — but also of making improvements when it comes to exploiting all those liquefied dinosaurs and other hydrocarbons.

An overview of the Yachay project.
(Credit: Senescyt)

The inclusion of both petrochemistry and renewable energy in that list of strategic industries to be pursued at Yachay is less a paradox than it is playing the cards the country’s been dealt. And after a series of oil-related accidents in the country — Chevron has been ordered to pay billions for contaminating remote tracts of the Ecuadorian jungle — developing more efficient, safer, and cleaner ways of getting at Ecuador’s primary source of wealth is also a good public-relations move.

In addition to working on renewables, petrochemistry, and pharmaceuticals, Ramirez hopes Yachay will also push the envelope in developing information technologies and the more far-out domain of nanotechnology.

Potential boost to global competition
While I don’t breach the topic with anyone involved with Yachay, it should at least be noted that carbon nanotubes are at the heart of most designs for the construction of a space elevator, and a locale like Ecuador that sits literally on top of the equator is an ideal site for such an experiment.

Likely though, the fruits of Yachay will be a bit more down to earth. Yachay project manager Ramiro Moncayo (you can read much more about him in tomorrow’s installment) believes sitting on the Earth’s midsection is also pretty handy for producing and refining solar energy technology. But no matter what the sector or technology, having another center for innovation — particularly the first of its kind on its continent — is potentially good for global competition, international relations, and ultimately, consumers.

Perhaps most importantly, Yachay promises to help erase more of humanity’s paradoxes.

Back on the Galapagos Islands in 2001, most of the facilities — including the tortoise breeding centers I mentioned earlier — were mainly powered by diesel fuel. In that year, a diesel tanker ran aground just off one of the islands and spilled more than 200,000 gallons of fuel into a delicate ecosystem. The spill devastated the population of marine iguanas that are unique to the Galapagos and inspired the drive towards renewable power here.

Today, therefore, the life of a newborn tortoise that will likely outlive you, me, and our children relies on a solar panel planted among piles of volcanic rock in this small country. If the vision for Yachay becomes reality, the technology that makes that possible might also be developed and born here as well.

Credit: Reposted from http://news.cnet.com/8301-17938_105-57575559-1/new-silicon-valley-in-the-andes-promise-and-paradox/

 

Ecuador and its social politics, lets be impartial and provide useful opinions.

An open letter to an ecuador-expat informative website.
I have been a constant reader of your email newsletters and also have referred your site to all my overseas contacts that need info on Ecuador. Now, after seing this headline on one of your last newsletters, “Why Correa is Good for Expats, and Nature’s Rights”, Gringo Tree Website Newsletter. I am completely disappointed about your partial opinion on most of your website topics where you refer to what the country has to offer to expats and relate most of the issues to the good will of the actual government.
I hope to see my comment publish on your site and newsletters, maybe I am wrong on my appreciation, but I believe on the freedom of opinion. I’m not involve in politics, but I do care for all social and environmental issues of our planet.
I have two well balance identities and carry both passports very proudly, Canadian and Ecuadorian, as most Canadians, we are blessed with the opportunity to believe and cultivate each of our cultures.
At the present moment, I am an expat residing in Guayaquil, with the great advantage of deeply knowing different countries overseas, meaning by this social, political, economical, and cultural aspects of each one, allowing me to view and analyze the social-political issues happening in Ecuador from different points of view.
Even though I have the right of expressing a direct opinion on Ecuadorian issues since I carry the Ecuadorian Passport, I do not dare to be so partial, since I have not been present through the hall history of the country. Also I do not have a clear perspective of past and present issues base on the idea that most of the official records  and mass information have never been handle systematically and with total freedom.
Of course, I will not certified that even in countries like Canada there is mismanagement of information, but certainly, there is a more rigorous control of the government by the people, also an open policy of mass communication and access to government records.
In Ecuador, previous governments and the actual one have lay the ground to grow into a prosperous and productive economy, but also, they have undermine and dismember most of the Ecuadorian society, using them to benefit their political campaigns purposes at times letting the people to loose their kind and noble identity. There is a lot of history behind this topic of social problems in Latin America, certainly there are few historians that believe that started since the Spaniards colonized the Americas, but today, I just want to stay on track on our topic – Ecuador politics and society-.
Since there is a lot of government clientelism and cronyism through the history of Ecuador up to the present days, the country goes through stagnant stages of economical growth due to a constant leap of the economical power between all the social groups that are behind the government’s power.
As a final thought, I could not assure if Mr. Correa is good or bad for Ecuador, but certainly neither could your website only promote Ecuador as a heavenly place due to the actual government work. Each country, culture and society have their on timing for growing. In reference to Ecuador, I could say it is a great place to look into if you like to move overseas, but there is a lot of things to be cautious before and once you are in the country.
Also, I do not know your background and knowledge on Ecuador and its politics, maybe you are been feed only by the actual on going news. It will work a lot better for the crowd who are interested in living or that are already living in Ecuador to obtain a more impartial, open, with ground bases and a deeper research of Ecuador social political happenings and developments.
Internationally there is a lot of news about Ecuador, good ones like the great nature to be found and its heath benefits, to real bad ones, like tow tourist girls been kidnapped up in the highlands. From the government greatest environmental project “YASUNI ITT” to save the unexploited oil reserves, to the 5% exit tax on money transfer from Ecuador. All of these information has to be filter base on the purpose of the reader, hope to see a progress in the near future of your website information to keep on refereeing it to searchers of overseas locations.
Thanks for you kind attention.
Lina Landivar
593.9.99499088
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